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S Finanzgruppe Sparkassenstiftung für internationale Kooperation
STRATEGIC RISK MANAGEMENT GAME
SPARKASSEN AND DEVELOPMENT COOPERATIONA success model “Made in Germany” blazes a trail around the world
Sparkassen (Savings Banks) were first introduced in Germany some 200 years ago as microfinance institutions for low-income earners. Since then, they have evolved into one of the largest financial groups in the world, successfully combining a high level of profes-sion alism with a strong social mandate.
As the Sparkassenstiftung für inter-nationale Kooperation (Savings Banks Foundation for International Coopera-tion, SBFIC), it is our mission to pass on this experience to our partners in developing and emerging countries.
Whether in Latin America and the Caucasus, in Central Asia, Africa or in Southeast Asia – since its foundation in 1992, Sparkassenstiftung has been promoting financial institutions that enduringly foster economic and social development by enabling sustainable access to financial products and servi-ces at local, regional or national level.
Sparkassenstiftung’s partner institu-tions essentially target micro, small and medium- sized enterprises (MSME), low and middle income earners and also socially marginalized groups in a bid to generate jobs or provide finan-cial services to the broad population.
Sparkassenstiftung conducts projects in all areas of banking.
Essentially, it focuses on the following six thematic priority areas, designed to foster financial inclusion:
Capacity Development
Financial Literacy
MSME Finance
Institution Building
Rural Finance
Green Finance
The colored areas mark regions in which the Sparkassenstiftung has been active since its foundation.
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BUSINESS GAMESA core module of knowledge transfer in leading financial institutions and universities
Business Games made by Sparkassen-stiftung have become an international brand for an innovative interactive learning experience. Learning with simulations is knowledge far away from dry theory. Interaction, practical exercise and the motivation to finish the game as the winner lead to a high learning success.
The participants always interact in groups, taking the role of managers and simulating the transactions and decisions of a bank, a microfinance institution, a small business or even a private household. In doing so, the
existing own knowledge is applied directly and expanded by sharing experience with the other players.
Discussions within the groups and the competition between them are essential parts of the didactic concept. Simulations allow a risk-free trial and error approach. In contrast to the real practice, erroneous decisions made here only inflict damage on virtual capi-tal. Each decision has an impact on the course of the next simulation round. The identification of the reasons and the analysis of contexts are the main learning objectives of the simulations.
Based on the interpretation of results and the evaluation of competitor perfor mance, teams are pursuing their goal to be successful.
Since the 1990s, Sparkassenstiftung has developed and used Business Games to train professionals and managers in developing countries and emerging economies. International and local instructors, who were specially trained by Sparkassenstiftung, evaluate the results of each round and analyze them in depth with all participants.
Sparkassenstiftung offers 7 Business Games for different target groups. Overall, some 3,000 trainings with more than 65,000 participants have been conducted in over 40 countries since the nineties with outstanding results and participant satisfaction.
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STRATEGIC RISK MANAGEMENT GAMEYour bank: a complex and dynamic system
Strategic Risk Management Game is a highly interactive training for bank managers and high potentials who want to get a better under standing of how bank risks are managed.
Vast demand and strong experience in many countries around the world as well as the positive feedback of highly
satisfied participants are convincing proof of the success and the added value of the Business Games.
Who reacts how and towards whom??
? What makes the competition successful? Which risks and opportunities have a direct link?
? What does the customer want? Which risks arise from (potential) customers?
Own Bank Competition
Customers & the Market
Successful Management
Are risks known and manageable??
!
Manager: Observer and part of the system
Where and when do risks arise in a bank?
? ? Are there recognizable trends and developments?
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OBJECTIVESThe interactive training approach for risk managers
Participants of the training learn the crucial principles of risk identification, analysis and effective management by taking risk management decisions in a simulated environment.
• Experience the financial manage-ment of a bank with a focus on bankspecific risks.
• Analyze financial statements, risk limits and risk-covering potential.
• Experience how to manage liquidity risks, interest rate risks, market price risks and credit risks.
• Raise awareness of how to handle operational risks.
• Become familiar with the options of risk management and risk hedging.
• Raise awareness of interdependen-cies between business opportunities and risks.
• Get to know and apply Basel III regulations for risk management.
The overall objective of the Strategic Risk Manage ment Game is to increase the awareness of managerial staff with a view to various types of risk exposures faced by a bank.
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Introduction to the cover story
D
Teams become familiar with initial situation
D
Theoretical content
D
Analysis and decision-making within the teams
D
SIMULATION OF THE RESULTS
D
Analysis of the simulation results
Professional in-depth evaluation
Link simulation to business practice
SET UPThe learning process is characterized by six phases
Participants are divided into small groups, each group assumes the leadership of a bank. The teams are introduced to the cover story and familiarized with the initial situation, macroeconomic and banking sector environment.
Participants analyze the financial and nonfinancial data of their banks and decide on the overall risk strategy of their bank.
A business plan is set up and managerial decisions are made in groups for up to eight periods and entered into the simulation software.
The simulation calculates the gross and net risk-covering poten-tial of each bank with the help of a model, based on real market data.
The simulation results including specific risk management reports are distributed and analyzed in groups.
Together with experienced trainers the results are discussed in transfer sessions considering Basel III regulations by setting them into the context of real banking business practice.
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The learning effects of the Strategic Risk Management Game are very tangible.
• Participants sharpen their analytical skills by comparing planning and reality and analyzing market values and trends.
• Uncoordinated actions and the use of the principle of hope give way to reflection and analysis.
• Real risk exposures are analyzed, goals and strategies for risk miti-gation are redefined and potential decisions are stress-tested.
• Complex situations are broken down, team work is actively performed and training results are transferred to actual banking business practices.
• Efficient measures of the implemen-tation of Basel III regulations can be discussed and tested.
IMPORTANT LESSONS LEARNEDLearning effects of the Strategic Risk Management Game
Be happy with good results – in the game and in real life.
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PARTICIPANT COMMENTSPositive feedback underlines the success model of the Strategic Risk Management Game
„ I liked that we were actively involved in the seminar and not only listened to the trainers.
„ Excellent professors with a strong background share the knowledge in the best way.
„ Our teachers were fully dedicated to us and all our questions.
„ High quality of lecturing, adjusted to the participants’ level of knowledge.
„ Excellent training program. Should be standard training for every banking professional.
„ The content was fully corresponding to a full-scale widening of professional competences.
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Sparkassenstiftung fürinternationale Kooperation
Finanzgruppe
Interested?
Sparkassenstiftung für internationale Kooperation e.V.
Simrockstr. 4 53113 Bonn Germany
Paul Kriews
+49 228 9703-6639
Elena Schlüter
+49 228 9703-6607
B www.sparkassenstiftung.de
